Video gambling offers a different spin for racetracks

Laurel Park, Pimlico hope to bring devices to Md.

When state lawmakers refused in the mid-1990s to legalize slot machines in Arkansas, the owners of tiny Oaklawn racetrack in Hot Springs didn't give up: They developed an alternative.

Dozens of video gambling machines -- developed in part by a Maryland company -- are now crowded into a busy, casino-like gameroom at the thoroughbred track.

They look, sound and play like slot machines. And each of the 180 devices generates more than $150 a day in profit on average. They are projected this year to become the track's No. 1 moneymaker, surpassing revenue from live and simulcast racing.

But the devices, which were designed jointly by Oaklawn and Hunt Valley-based AmTote International, aren't slot machines. If they were, they would be illegal because Arkansas -- like Maryland -- doesn't permit slots and other games of chance at its tracks.

"This is a great alternative to slots," said Lou Cella, Oaklawn's vice president. "We're attracting new people to racing. It's been an absolute savior to our racing program."

The "instant racing" machines at Oaklawn are a close cousin to other electronic gambling devices -- such as video bingo machines -- that are sprouting up across the country to exploit loopholes in state gambling laws.

Several Maryland counties have seen the installation of video bingo games, and more may be on their way. And the owner of Pimlico Race Course and Laurel Park, Magna Entertainment Corp., says it plans to roll out its own brand of video racing games this year, assuming they are approved by state regulators.

The devices cash in on the public's appetite for fast-paced electronic games similar to slots. But they are engineered to technically comply with state laws that allow only restricted forms of gambling -- such as bingo or pari-mutuel wagering on horse races.

"It's got the quick action; every few minutes you can bet a race," Magna Chairman Frank Stronach told reporters last week. "It looks like a slot machine. It acts like a slot machine. But it's pari-mutuel racing."

He offered few other details, and Magna officials did not return telephone calls Thursday and Friday seeking further information about when they plan to bring the machines to Maryland and how many of the devices they hope to install.

Bruce Spizler, legal counsel to the Maryland Racing Commission, said that, to his knowledge, Magna has not yet sought regulatory approval to install the devices.

"I would have to do some research -- legal and factual -- to ascertain whether it's authorized under the existing law," he said.

Cella said the "instant racing" machines Oaklawn developed with AmTote through RaceTech Inc. LLC, have passed regulatory muster in Arkansas, Oregon and Wyoming, and racetracks in other states are considering them as well.

John Corckran, the president of AmTote -- a company that provides pari-mutuel wagering services to racetracks and that is partly owned by Magna -- said demand for the machines is building in states that forbid slots.

"We've been able to design a [racing] game that has the speed and fun of other types of gaming that people like," Corckran said. "It attracts an entirely different audience to the racetrack -- maybe people who have never even seen racing before."

The machines that Oaklawn and AmTote developed and patented use more than 100,000 horse races that have already been run.

Bettors are given information about the records of the horses, jockeys and trainers -- but not their names, so a fan who may have seen the race won't know the outcome.

A player can bet from a nickel to $5 on three horses. One portion of the video screen shows a replay of the race, and another shows a spinning reel with slot-style icons -- such as horseshoes -- that line up to indicate when a player wins a bet.

If a player selects the right horses in the right order to finish, he wins whatever amount of money is available in the betting pool. Most players opt to view only the last few seconds of the race for quicker play, Cella said.

Jackpots have reached as high as $18,000 for the Pick 4 jackpots, Cella said. To win, a player has to select the winning horse in four successive races. The pool grows until someone hits the jackpot. The payback to bettors ranges from 88 cents to 94 cents on the dollar.

Magna's video racing machines, also being developed with AmTote, take a different approach: They link to live races around the country rather than to races that have been run.

Cella sees a burgeoning market for video racing machines in states where racetrack owners have been stymied in getting legislative approval for slots.

Steven W. Barham, associate coordinator of the Race Track Industry Program at the University of Arizona in Tucson, said the devices might help tracks compete with casino-style gambling that has spread around the country.